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Recording a Security AgreementRecording a Security Agreement

Recording a Security Agreement

AOPA's Title Services provider, Aero-Space Reports, 800-765-2336, can help you with all your title and escrow needs.

The FAA maintains a system for recording aircraft ownership and lien data. Two types of liens may be filed and recorded:

  1. Two party, "consensual" security agreements (finance lien)
  2. Single party, "nonconsensual" liens (mechanics/artisans lien)

To record a two party, consensual security agreement:

  1. The "secured party" (the individual or institution lending the money) sends to the FAA, a security agreement. AOPA suggests using the official FAA version, AC Form 8050-98, "Aircraft Security Agreement." If the "secured party" chooses to develop or submit their own security agreement, the contents must comply with FAR Part 49. A lending institution's security agreement usually contains all required information.
  2. Upon receipt of the security agreement, the FAA time-stamps the agreement and files it for future recordation. For filing disputes, the official date of the lien is the date of receipt, not date of actual recordation.
  3. The FAA returns AC Form 8050-41, "Recordation/Release of Lien." This provides confirmation of receipt and can be held or referenced for any future lien releases.
  4. AOPA’s Pilot Information Center also has the FAA form: ‘Aircraft Contract of Conditional Sale’ that is used for an owner sale (no down payment) where title does not transfer until a later prescribed time, typically when a certain percentage of equity is reached. Unlike a real estate conditional sale contract, utilization of this instrument has caused sellers some problems in the past. Phone the AOPA PIC to discuss your situation.

The FAA provides detailed information in AC 8050-93 (04/07), "Recording of Aircraft Ownership and Security Documents."

The validity of a lien depends on state law. In other words, it is not the decision of the FAA that a lien is valid; the FAA merely records the lien. For FAA purposes, a lien is "recordable" if received before of any change in ownership is recorded. Though recordable, state law may consider the lien "invalid" if the aircraft is not shown as owned by the debtor at the time. Generally it is the date on the bill of sale that ownership is officially transferred.

Liens must be recorded with the FAA for the highest-level priority*. Filing with the state (UCC) or local government alone will not "perfect" the lien; the only exception is the IRS, which may record in the owner's county courthouse. This is generally not a factor since the IRS will usually have already seized the aircraft if it wanted it. The only way to ensure that an aircraft is free of IRS liens is to check court records.

NOTE: as of March 1st, 2006:
Aircraft with 8 or more seats, including crew, (helicopters with 5 or more) AND engines of 550shp or more must register/record with a new ‘World’ aircraft registry. See details here. Title searches for such aircraft would have to be done at the World-level as well.

AOPA's Title Services provider, AIC Title Services, LLC 800-288-2519, can help you with all your title and escrow needs.

Updated June 1, 2011